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Why Are Bitcoins Problematic

The Looming Problem That Could Kill Bitcoin

The Looming Problem That Could Kill Bitcoin

The Looming Problem That Could Kill Bitcoin The man who took over stewardship of Bitcoin from its mysterious inventor says the currency is in serious trouble. The way things are going, the digital currency Bitcoin will start to malfunction early next year. Transactions will become increasingly delayed, and the system of money now worth $3.3 billion will begin to die as its flakiness drives people away. So says Gavin Andresen, who in 2010 was designated chief caretaker of the code that powers Bitcoin by its shadowy creator. Andresen held the role of core maintainer during most of Bitcoins improbable rise; he stepped down last year but still remains heavily involved with the currency (see The Man Who Really Built Bitcoin ). Andresens gloomy prediction stems from the fact that Bitcoin cant process more than seven transactions a second. Thats a tiny volume compared to the tens of thousands per second that payment systems like Visa can handleand a limit he expects to start crippling Bitcoin early in 2016. It stems from the maximum size of the blocks that are added to the digital ledger of Bitcoin transactions, the blockchain, by people dubbed miners who run software that confirms Bitcoin transactions and creates new Bitcoin (see What Bitcoin Is and Why It Matters ). Andresens proposed solution triggered an uproar among people who use or work with Bitcoin when he introduced it two weeks ago. Rather than continuing to work with the developers who maintain Bitcoins code, Andresen released his solution in the form of an alternative version of the Bitcoin software called BitcoinXT and urged the community to switch over. If 75 percent of miners have adopted his fix afterJanuary 11, 2016, it will trigger a two-week grace period and then allow a fork of the blockchain with higher c Continue reading >>

Bitcoin's Other Scaling Problem - Bitcoin News

Bitcoin's Other Scaling Problem - Bitcoin News

Although many Bitcoiners subscribe to laissez-faire political and economic beliefs of the libertarian variety, some invisible politics has reared its ugly head in the Bitcoin Community thanks to the digital currencys scaling issues. The growth of Bitcoin has created a variety of social governance problems that have left many in the Community confused. Also Read: Bitcoin Block Size Growth Plan BIP100 Gets Update While focus has been largely on scaling Bitcoin at the technical level to make room for increasing transaction demands, the distributed governance of Bitcoin itself has proven difficult. There are two types of governance. Governance of a specific software project and governance over consensus rules, submits Eric Lombrozo, Bitcoin developer and CEO of Ciphrex. For historical reasons, the two have been conflated in the minds of many people. Mr. Lombrozo suggests problems could manifest in several ways. Governance over a particular software codebase doesnt require universal agreement over all changes as long as it remains compatible with the existing network, he says. Its only when compatibility is broken that it creates issues that affect everyone in the community. Further adding questions to Bitcoins social issues, when former Bitcoin developer Mike Hearn left Bitcoin for R3CEV, he lamented how Bitcoin had become completely controlled by just a handful of people. Critics have claimed Bitcoin needs a benevolent dictator to expand and onboard an increasing number of transactions. Someone, or some group, must decide how to meet users requirements, Reuters reported on the opinions of some in the Bitcoin space. Cornell Computer Science professor, Dr. Emin Gun Sirer, cites Ethereum, a blockchain smart contract model, and its benevolent dictator model as a working examp Continue reading >>

Bitcoins Problem With Women

Bitcoins Problem With Women

While Kevin Drum is focused on getting better, weve invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 through today to pitch in posts and keep the conversation going. Heres a contribution from Felix Salmon, who, after years of blogging on finance and the economy for Reuters and other outlets, is now a senior editor at Fusion . Nathaniel Poppers new book, Digital Gold , is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the misfits (the first generation of hacker-libertarians) and millionaires (the second generation of Silicon Valley venture capitalists) who were responsible for building Bitcoin, mining it, hyping it, and, in at least some cases, getting rich off it. The tale is selective, of course: Not everybody involved with Bitcoin talked to Popper, and the identity of Bitcoins inventor, Satoshi Nakamoto, remains a mystery. But Popper did talk to most of the important people in the cryptocurrency crowd, and he tells me that he put real effort into trying to find a woman who was involved in some substantive way. The result of that search? Zero. Nothing. Zilch. Poppers book features no female principals at all: The sole role of women in the book is as wives and girlfriends. Big crowd at #bitcoinexpo in London pic.twitter.com/rrWb9ipwBZ Stacy Herbert (@stacyherbert) November 30, 2013 There are nasty consequences of this. If you are a woman involved with Bitcoin, you are invariably going to get treated like an outsider. As Victoria Turk says, it seems that the only Bitcoin community that particularly welcomes female participation is the NSFW subreddit r/GirlsGoneBitcoin, which is basically a site where women get paid i Continue reading >>

The Problem With Bitcoin And Blockchain Technology

The Problem With Bitcoin And Blockchain Technology

Evaluate Weigh the pros and cons of technologies, products and projects you are considering. The problem with bitcoin and blockchain technology It's not just bitcoin's prodigious appetite -- it uses as much energy as the country of Slovenia. Security scares and long transaction times cast doubt on its viability. CIO Trends #2: Nordics ComputerWeekly.com It's stunning to see the price of bitcoin rocket into the stratosphere. But almost equally surprising is the fact that so many software architects and solution developers, inspired by the bitcoin story, are looking for ways to integrate blockchain technology into their architectures. Download now: Java EE moves to the Eclipse Foundation What are application developers and market analysts saying about Oracles decision to move Java EE to the Eclipse Foundation? What will this change? Find out here. This email address doesnt appear to be valid. This email address is already registered. Please login . You have exceeded the maximum character limit. Please provide a Corporate E-mail Address. By submitting my Email address I confirm that I have read and accepted the Terms of Use and Declaration of Consent. By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers. You also agree that your personal information may be transferred and processed in the United States, and that you have read and agree to the Terms of Use and the Privacy Policy . In the healthcare industry, there is talk about consolidating patient records across hospitals using blockchain. The Republic of Georgia is using blockchain to verify property transactions. Governments are looking at using blockchain to verify the identity of their citizens or even to adopt a cr Continue reading >>

Bitcoin Scalability Problem

Bitcoin Scalability Problem

For a broader coverage related to this topic, see Bitcoin . The bitcoin scalability problem exists because of the limits of the maximum amount of transactions the bitcoin network can process. It is a consequence of the fact that blocks in the blockchain are limited to one megabyte in size. [1] Bitcoin blocks carry the transactions on the bitcoin network since the last block has been created. [2] :ch. 2 In contrast to Visa's peak of 47,000 transactions per second, [3] the bitcoin network's theoretical maximum capacity sits between 3.3 to 7 transactions per second. [4] [5] The one-megabyte limit has created a bottleneck in bitcoin, resulting in increasing transaction fees and delayed processing of transactions that cannot be fit into a block. [6] Various proposals have come forth on how to scale bitcoin, and a contentious debate has resulted. Business Insider in 2017 characterized this debate as an "ideological battle over bitcoin's future." [7] On 21 July 2017 bitcoin miners locked-in a software upgrade referred to as Bitcoin Improvement Proposal (BIP) 91, meaning that the controversial Segregated Witness upgrade activated at block 477,120. [8] A fork (referring to a blockchain) is what occurs when a blockchain splits into two paths moving forward. Forks on the bitcoin network regularly occur as part of the mining process. They happen when two miners find a block at a similar point in time. As a result, the network briefly forks. This fork is subsequently resolved by the software which automatically chooses the longest chain, thereby orphaning the extra blocks added to the shorter chain (that were dropped by the longer chain). A blockchain can also fork when developers change rules in the software used to determine which transactions are valid. [9] As per CoinDesk , a h Continue reading >>

Problems And Risks For Cryptocurrency Users Kaspersky Lab Official Blog

Problems And Risks For Cryptocurrency Users Kaspersky Lab Official Blog

Cryptocurrencies are basically the same as e-money like WebMoney or PayPal. That means they also have the same problems as classic e-payment systems. However, the operating principles specific to cryptocurrencies sometimes make the problems more likely to occur, and thus more disturbing. In addition, the same principles are responsible for a certain number of risks unique to cryptocurrencies. Spoofing payment information and phishing Well start with common problems such as plain old theft. Lets say youre transferring money to a friend. You copy his wallet address accurately, but malware replaces the address in the clipboard with another one . Not every user is vigilant and double checks an address after copying it. Especially if the address is a long jumble of characters. Or take phishing, for another example. As with ordinary e-money, users can be tricked into going to a phishing website where they upload their cryptowallets and enter a password. Of course, users of a traditional bank or payment system can also run into trouble with cyberthieves. However, with a traditional system there is always a fairly good chance of canceling the transfer. In the case of cryptocurrencies, you might as well try to complain to the United Nations. What happens in blockchain stays in blockchain. On top of that, even using a genuine payment gateway with the correct address can result in a loss of money. In June 2017, the most popular Web wallet for the Ethereum Classic cryptocurrency, with the original address , suddenly started stealing money from users wallets. Turned out, hackers had used social-engineering methods to convince the hosting provider that they were the real domain owners. After gaining access, they started intercepting cash flows. Luckily, the strategy those hackers us Continue reading >>

What's Your Biggest Problem With Bitcoin ? : Bitcoin

What's Your Biggest Problem With Bitcoin ? : Bitcoin

Do not use URL shortening services: always submit the real link. Begging/asking for bitcoins is absolutely not allowed, no matter how badly you need the bitcoins. Only requests for donations to large, recognized charities are allowed, and only if there is good reason to believe that the person accepting bitcoins on behalf of the charity is trustworthy. News articles that do not contain the word "Bitcoin" are usually off-topic. This subreddit is not about general financial news. Submissions that are mostly about some other cryptocurrency belong elsewhere. For example, /r/CryptoCurrency is a good place to discuss all cryptocurrencies. Promotion of client software which attempts to alter the Bitcoin protocol without overwhelming consensus is not permitted. Trades should usually not be advertised here. For example, submissions like "Buying 100 BTC" or "Selling my computer for bitcoins" do not belong here. /r/Bitcoin is primarily for news and discussion. Please avoid repetition /r/bitcoin is a subreddit devoted to new information and discussion about Bitcoin and its ecosystem. New merchants are welcome to announce their services for Bitcoin, but after those have been announced they are no longer news and should not be re-posted. Aside from new merchant announcements, those interested in advertising to our audience should consider Reddit's self-serve advertising system . Do not post your Bitcoin address unless someone explicitly asks you to. Be aware that Twitter, etc. is full of impersonation. Continue reading >>

Bitcoin Scaling Problem, Explained

Bitcoin Scaling Problem, Explained

Yes, it does. It has been unresolved for a while and is getting worse with time. Bitcoin runs on the software created by a programmer or a group of programmers known as Satoshi Nakamoto back in 2007-09. Despite the many improvements, which have been made by contributing developers over the course of Bitcoins existence, the code base is still pretty similar to what it was eight years ago and some of the limitations are still there. The problem is, the current landscape of the Bitcoin ecosystem is very different from what it used to be back at the inception of the cryptocurrency. The number of people involved has grown from a few dozens of passionate enthusiasts to over 10 mln of everyday users. The growing user base is naturally accompanied by a constantly increasing number of daily transactions, which are now counted by the hundreds of thousands . The unfortunate reality is that the Bitcoin network, in its current state, is unable to process all those transactions fast enough. Why is Bitcoin unable to cope with all the transactions? The problem lies in a specific parameter called the block size limit. The current limit is insufficient for the ever-growing transaction intensity. First, a very quick and basic introduction to how Bitcoin works for those who dont know. All the transactions that have ever taken place in the Bitcoin network or will ever take place, are recorded on a public and immutable ledger called The Blockchain. As follows from its name, the Blockchain is a sequence of blocks. Each block, in turn, is a cryptographically sealed collection of all transactions which have happened in the network over the past ten minutes. Every new block is permanently added to the end of the Blockchain so that every user can always check that each specific transaction has i Continue reading >>

The Five Biggest Threats Facing Bitcoin

The Five Biggest Threats Facing Bitcoin

May 26, 2014 at 18:33 UTC|UpdatedMay 27, 2014 at 14:52 UTC Any new, disruptive technology will have its fair share of detractors doing their best to limit its potential. The idea that people would need their own personal computer for work seemed ludicrous 50 years ago. Why would anyone need a device for making automated calculations?Today, though, it is almost impossible to function in modern life without using a PC. The automated teller machine, or ATM, was thought to be a needless apparatus by many when it came out. Who would need access to money outside of bank hours?Now, more people use ATMs than go and queue in branches. Bitcoin is a new concept edging its way into the mainstream, thus, it is not immune to negativity and unfavorable public perception. It is undeniable that the digital currency has its enemies, either real people or perceived notions. So what are some of the biggest problems it faces right now? The idea of mining, for many who first come across the concept of bitcoin, seems bizarre. When broken down into a peer-to-peer way of confirming transactions , however, it makes a lot of sense. It made a lot more sense, though, when any bitcoin node, on any computer, had a chance to confirm transactions and thus be rewarded a block. But that doesn't happen anymore. Although bitcoin was built with good intentions in mind, altruistic systems are often exploited.And this is what has happened to the bitcoin network. The problem is that there is little incentive to run a node anymore . That's because powerful machines built specifically for bitcoin's SHA-256 proof-of-work algorithm have changed its decentralized and more open nature. Power curve: Difficulty on the Bitcoin network over the past year. Source: Blockchain This has, in effect, concentrated bitcoin's c Continue reading >>

Bitcoin's Rise Presents A Problem

Bitcoin's Rise Presents A Problem

With the price of Bitcoin skyrocketing by the hour , it's either time to buy buy buy or step back a moment and ask ourselves just exactly how Bitcoin went from a proposed digital currency to an increasingly popular investment opportunity and what that says about its future. As this is a blog post and not the internal dialogue of a cryptocurrency trader, we're going to go with the second option. SEE ALSO: This was Bitcoin's big year, but where does it go from here? Launched in 2009 by a still unknown person (or persons) under the pseudonym of Satoshi Nakamoto , Bitcoin offered a decentralized currency that removed any sort of central authority from the mix. This, of course, is a fascinating idea and over the following few years news outlets reported on it with a mixture of confusion and befuddled amusement (if they covered it at all). But that didn't stop Bitcoin or its adherents. In 2010, a Florida programmer made what is generally considered the first transaction paying with Bitcoin 10,000 BTC for two pizzas and the dream of a digital currency was one step closer to reality. But, wait you're surely asking yourself right now 10,000 Bitcoin for a pizza? And you'd be right to be incredulous. At today's BTC prices, the cost of that pizza comes out to $170,999,950, although that value changes hourly. The #Bitcoin pizza is worth $141,685,600 today. (+14% from yesterday) Bitcoin Pizza (@bitcoin_pizza) December 7, 2017 That hourly change with Bitcoin shooting up in value thousands of dollars today alone is great for investors holding their BTC to sell at a later date, but not so good for anyone trying to use it to, actually, you know, buy something. This extremely volatile state, combined with high transaction fees, even led one major company to cease accepting Bitcoin as a f Continue reading >>

Big Transaction Fees Are A Problem For Bitcoin But There Could Be A Solution

Big Transaction Fees Are A Problem For Bitcoin But There Could Be A Solution

Bitcoin transaction fees are proving to be profitable for so-called bitcoin "miners". Miners work out complex cryptographic puzzles to add transactions to the blockchain, a decentralized record of all bitcoin transactions. They are paid in bitcoin in return for their services. On Monday, the total value of all transaction fees paid to miners hit an astronomical sum above $11 million on that one day, according to Blockchain.com data. A debate has been brewing among the bitcoin community surrounding transaction times and fees. Right now it takes an average time of 78 minutes to confirm a bitcoin transaction, according to Blockchain.com. But on Sunday the average time was as high as 1,188 minutes. Slow transaction speeds and fees has led to a number of splits in the original blockchain. In August, the blockchain was forced to split in two a phenomenon known as "hard fork." This led to the creation of a bitcoin spinoff called bitcoin cash. Another fork occurred in October , spawning yet another digital asset called bitcoin gold. These bitcoin offshoots have spawned because some within the bitcoin community believe that the size of blocks records of transactions on the network should be increased. A proposed update known as SegWit2x would have increased the block size from one to two megabytes, but this was dropped last month. Separating bitcoin from its altcoin rivals The boss of blockchain firm Ripple, whose digital currency XRP is the fourth-largest by market value, is skeptical about the use of bitcoin for payments and transfers. "I don't think bitcoin is well-positioned to solve the payments problem," Ripple's CEO Brad Garlinghouse told CNBC earlier this year. Garlinghouse said that his firm's cryptocurrency was "enabling transactions in seconds," adding that the cost Continue reading >>

Bitcoin Is Surging Towards A Serious Mining Problem And No One Knows What Will Happen When It Gets There

Bitcoin Is Surging Towards A Serious Mining Problem And No One Knows What Will Happen When It Gets There

Business Insider UK spoke with Garrick Hileman about Bitcoin mining. Hileman explains why Bitcoin mining might not be as profitable in the future. As more users are mining Bitcoin, the amount rewarded for doing so is going down. Business Insider UK spoke with University of Cambridge Research Fellow Garrick Hileman about cryptocurrency mining and the potential problems that it could bring in the future. He explains that the amount of Bitcoin rewarded for mining is halved every four years which means that it will be less profitable. Garrick Hileman: So as we look into the future and the reward of new Bitcoins is reduced from the current 12.5 to about 6.25 new Bitcoins every ten minutes which will occur in around July 2020. Every four years that reward gets cut in half. Eventually you get to the point where the nominal number of new Bitcoins you earn for mining Bitcoin becomes quite small. Now if the price of Bitcoin continues to climb above 100,000 per Bitcoin, then mining a tiny fraction of Bitcoin still is quite lucrative. But ultimately the number of new Bitcoins coming into existence through mining will be cut to zero. We'll hit the 21 million limit and the only direct financial incentive left to mine Bitcoin will be transaction fees and there's an open question as to whether or not the transaction fees will provide a sufficient financial incentive to maintain the kind of computing power that Bitcoin enjoys today which is essential to its security. If the computational power applied to the Bitcoin network is reduced sufficiently it arguably makes it easier to mount a 51 per cent attack to disrupt the network and so there could be some issues down the road if the rewards are not sufficient. However there could be a reason to subsidise the cost of mining if Bitcoin con Continue reading >>

We Must Regulate Bitcoin. Problem Is, We Don't Understand It

We Must Regulate Bitcoin. Problem Is, We Don't Understand It

We Must Regulate Bitcoin. Problem Is, We Don't Understand It We Must Regulate Bitcoin. Problem Is, We Don't Understand It We Must Regulate Bitcoin. Problem Is, We Don't Understand It Bitcoin has failed . Bitcoin is the future . Bitcoin cannot be regulated . Bitcoin needs to be regulated . The debate over what will happen to the decentralized virtual currency has reached a cacophonous point, and now lawmakers around the world are wondering whether the time has finally come to regulate this emerging technology. As I have said before, Bitcoin as a virtual currency presents significant challenges to regulators. But one should not be too hasty to regulate Bitcoin, without fully understanding the implications of blockchain technologies more generally, with regard to their impact on innovation, competition and regulation. Primavera De Filippi is a researcher at CERSA / CNRS and faculty associate at the Berkman Center for Internet & Society at Harvard. With a 5 billion market cap, Bitcoin is slowly making its way into the digital economy, and a growing number of merchantsincluding Overstock, Newegg, Expedia, Dell and even Microsoftare now accepting Bitcoin as a possible form of payment for their products. Of course, regulation will be needed eventually, both to address the risks and maximize the benefits of the technology. But it is difficult to regulate today a technology that we do not yet fully understand. Given the experimental nature of blockchain technologies, whose possible uses and applications are still to a large extent unknown, regulation should be elaborated carefully and in a well-informed manner, to avoid precautionary measures from curtailing the future of these new technologies. Last month, the European Parliament held a public hearing (organized by the Committ Continue reading >>

What's Your Biggest Problem With Bitcoin ? : Bitcoin

What's Your Biggest Problem With Bitcoin ? : Bitcoin

Do not use URL shortening services: always submit the real link. Begging/asking for bitcoins is absolutely not allowed, no matter how badly you need the bitcoins. Only requests for donations to large, recognized charities are allowed, and only if there is good reason to believe that the person accepting bitcoins on behalf of the charity is trustworthy. News articles that do not contain the word "Bitcoin" are usually off-topic. This subreddit is not about general financial news. Submissions that are mostly about some other cryptocurrency belong elsewhere. For example, /r/CryptoCurrency is a good place to discuss all cryptocurrencies. Promotion of client software which attempts to alter the Bitcoin protocol without overwhelming consensus is not permitted. Trades should usually not be advertised here. For example, submissions like "Buying 100 BTC" or "Selling my computer for bitcoins" do not belong here. /r/Bitcoin is primarily for news and discussion. Please avoid repetition /r/bitcoin is a subreddit devoted to new information and discussion about Bitcoin and its ecosystem. New merchants are welcome to announce their services for Bitcoin, but after those have been announced they are no longer news and should not be re-posted. Aside from new merchant announcements, those interested in advertising to our audience should consider Reddit's self-serve advertising system . Do not post your Bitcoin address unless someone explicitly asks you to. Be aware that Twitter, etc. is full of impersonation. Continue reading >>

Problems And Risks For Cryptocurrency Users Kaspersky Lab Official Blog

Problems And Risks For Cryptocurrency Users Kaspersky Lab Official Blog

Cryptocurrencies are basically the same as e-money like WebMoney or PayPal. That means they also have the same problems as classic e-payment systems. However, the operating principles specific to cryptocurrencies sometimes make the problems more likely to occur, and thus more disturbing. In addition, the same principles are responsible for a certain number of risks unique to cryptocurrencies. Spoofing payment information and phishing Well start with common problems such as plain old theft. Lets say youre transferring money to a friend. You copy his wallet address accurately, but malware replaces the address in the clipboard with another one . Not every user is vigilant and double checks an address after copying it. Especially if the address is a long jumble of characters. Or take phishing, for another example. As with ordinary e-money, users can be tricked into going to a phishing website where they upload their cryptowallets and enter a password. Of course, users of a traditional bank or payment system can also run into trouble with cyberthieves. However, with a traditional system there is always a fairly good chance of canceling the transfer. In the case of cryptocurrencies, you might as well try to complain to the United Nations. What happens in blockchain stays in blockchain. On top of that, even using a genuine payment gateway with the correct address can result in a loss of money. In June 2017, the most popular Web wallet for the Ethereum Classic cryptocurrency, with the original address , suddenly started stealing money from users wallets. Turned out, hackers had used social-engineering methods to convince the hosting provider that they were the real domain owners. After gaining access, they started intercepting cash flows. Luckily, the strategy those hackers us Continue reading >>

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